Banks are still pouring money into AI companies, but they're now buying insurance against those same companies defaulting, a quiet warning sign for anyone invested in the AI boom.

• Big banks like Barclays, JPMorgan, and HSBC are buying credit default swaps, insurance that pays out if an AI company can't pay back its debt.
• The amount of this insurance being traded has more than quadrupled since summer, a sign that lenders are getting nervous fast.
• This is the same tool Michael Burry used to bet against the housing market before the 2008 crash, and the same banks are still writing new AI loans even as they hedge against them failing.
• Many AI companies are also lending money back and forth to each other, adding another layer of risk if one piece breaks.
• If the AI industry does stumble, the losses could ripple through the same banks that are already too big to let fail, raising the risk of another taxpayer bailout.

Outlook: Watch this insurance market closely, rising activity here has historically been an early warning before a bigger financial shock.